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Cleveland Clinic in the UAE Case Study


Introduction

The Cleveland Clinic is a medical centre that is located in Abu Dhabi, UAE. The clinic is a multi-specialty institution. Cleveland Clinic has a bed capacity of 364 people, which can also be expanded to 490 bed capacity. The hospital is currently under construction and is expected to be complete by the end of 2013. The clinic will be offering a number of medical services, ranging from primary to tertiary services.

The services to be offered in this hospital will help Abu Dhabi and the United Arab Emirates region to access international standards of healthcare. The demand for services from the clinic is going to be high given that it will be a leading clinic in the Middle East region. This paper will analyse the market conditions of Cleveland Clinic.

Price elasticity of demand for the services offered at Cleveland Clinic

Price elasticity of demand refers to the changes in demand that result from a percentage change in the price of a commodity, or a service. Price elasticity of demand normally has a negative figure, but the negative sign is usually ignored despite the fact that it is likely to bring some kind of ambiguity.

Cleveland Clinic is expected to be offering international healthcare services in the United Arab Emirates. The clinic will be providing multi speciality services as well. No other health institution offers services of that level in the region. Therefore, the price elasticity of demand for the hospital’s services will be inelastic.

This means that an increase in price will not cause any change on the demand. It is important to note that the price elasticity of demand for health services is generally inelastic since people do not have options other than acquiring the services when they are sick or need medical attention.

Cost and market structure

The cost of operation of the Cleveland Clinic is likely to be relatively high due to the kind of services it will be offering. High-level and specialized services will be offered in this health institution, thus the operating costs are expected to be high. The health centre operates in a monopolistic competition market structure.

This is the kind of market structure that has a few large organizations that dominate the market, where each of the firms has a small share of the market and offers differentiated products or services. Cleveland Clinic is the largest health centre in the region at the moment. There are other health centres that compete with it, thus the clinic is not a monopoly. Cleveland Clinic offers differentiated services. The other players in the market also offer differentiated services, making the market structure a monopolistic competition.

Impacts of global competition on Cleveland Clinic

Globalization has been dominant in the world market over the last couple of decades. Most organizations have established international operations. The Cleveland Clinic will be offering its services internationally, thus it will be affected by the global competition.

In the global competition, every organization tries to offer the best services to win more customers and increase profitability. Global competition has led Cleveland Clinic to establish specialised services in the bid to adopt differentiation. This will help the clinic get more customers and improve its performance.

Cleveland Clinic should expand its current operations

The objective of every organization is to keep improving and maximizing profits. Other competitor organizations will always be working to win the competitive advantage. Therefore, it is important for Cleveland Clinic to keep on expanding its operations as, well as diversify the operations to maintain its competitive position. Failure to diversify might lead to the clinic being overtaken in terms of competition and lose profitability.

Expand

Cleveland Clinic is currently located in the Abu Dhabi and it offers international standard services, thus it is likely to get customers from all over the globe. It is important for Cleveland Clinic to invest in new products, services, and locations in its bid to expand operations because some customers may find it difficult to travel to Abu Dhabi to get the services. This way, the clinic will be able to reach more customers.

Cleveland Clinic will also be in a better position to survive the global competition. The pressure of global competition on the clinic is likely to reduce if the organization expands its operations. Investing in new clinics and service locations will help the clinic to get a wide range of customers from all over the globe. Global competition exerts more pressure on organizations that have less service/ operation locations. Therefore, the global competition will impact the organization positively if it establishes new locations in various parts of the globe.

Effects of government policies, social diversity and business ethics

Business operations are affected in different ways by government policies. Government policies usually influence the plans of the government, as well as the government’s activities and intentions. In turn, government activities have a direct effect on the business operations.

An organization’s plan should be in line with those of the government. For instance, there is a probability that the costs charged on customers will go up if the government of the United Arab Emirates implements taxes on medical facilities and services. It is possible that the taxes charged on the clinic will be higher bearing in mind that Cleveland Clinic offers services to an international community. Its services will, therefore, be a slightly more expensive.

This will affect its competitiveness since people may opt for cheaper clinics. The government may also implement subsidies on medical facilities, a factor that will have a direct effect on the cost of services offered by Cleveland Clinic. In addition, its activities should not counter those of the government. The policies of the United Arab Emirates government are going to affect the operations of Cleveland Clinic. Therefore, the clinic should execute its operations in such a manner that it adheres to the government policies.

Health institutions are meant to serve the society by offering health services. Workers in such institutions should be in a position to handle people from various ethnicities, cultures, as well as social classes. Cleveland Clinic being an international institution will be offering services to a widely diversified society.

Therefore, social diversity will have an effect on its operations. Other communities and cultures are expected to be visiting Cleveland Clinic, although most of the customers will be of the Arabic origin. There is a possibility that the Cleveland Clinic will lose its competitive advantage in case it will not able to handle or deal with different cultures and their demands. Therefore, Cleveland Clinic should ensure that its employees and management are able to deal with social diversity.

Business ethics

Business ethics are very important in every organization. Business ethics refer to the good behaviours of the organization and the way the organization treats its stakeholders. The stakeholders in this case include the employees, shareholders, customers, as well as the community.

A health institution is obliged to embrace good ethics since it deals with the lives of people. Health institutions offer very sensitive services and should be very cautious of ethics. Cleveland Clinic has to ensure that it adopts good ethics if it is to succeed in its operations. Business ethics will help the clinic improve its operations, a move that will help it create a good relationship with its customers. This will, in turn, give Cleveland Clinic a competitive edge.

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IvyPanda. (2019, July 4). Cleveland Clinic in the UAE. Retrieved from https://ivypanda.com/essays/cleveland-clinic-in-the-uae/

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"Cleveland Clinic in the UAE." IvyPanda, 4 July 2019, ivypanda.com/essays/cleveland-clinic-in-the-uae/.

1. IvyPanda. "Cleveland Clinic in the UAE." July 4, 2019. https://ivypanda.com/essays/cleveland-clinic-in-the-uae/.


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IvyPanda. "Cleveland Clinic in the UAE." July 4, 2019. https://ivypanda.com/essays/cleveland-clinic-in-the-uae/.

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IvyPanda. 2019. "Cleveland Clinic in the UAE." July 4, 2019. https://ivypanda.com/essays/cleveland-clinic-in-the-uae/.

References

IvyPanda. (2019) 'Cleveland Clinic in the UAE'. 4 July.

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